(Yicai Global) Sept. 24 -- BOE Technology Group, China's biggest maker of television screens, announced the biggest-ever merger and acquisition deals in the country’s liquid-crystal display industry in an effort to stay ahead of TCL China Optoelectronics Technology.

BOE plans to invest at least CNY12.1 billion (USD1.8 billion) in two liquid-crystal display makers, the Beijing-based company said in a statement yesterday. It will spend no less than CNY5.6 billion for 80.8 percent of CEC Panda FPD Technology and CNY6.5 billion for 51 percent of CEC Panda Display Technology.

Main rival TCL CSOT bought Samsung Electronics' 8.5-generation display production assets in the Chinese city of Suzhou for USD1.1 billion last month. While BOE has a marginal lead in output, the pair will be churning out half of all China-made TV panels after wrapping up their respective deals, which are likely to trigger a sector-wide shakeup.

The acquisitions should help BOE maintain its lead in the information technology display business, offsetting TCL CSOT's short-term efforts, according to Bian Zheng, deputy research director at market research firm All View Cloud.

The deals involve two types of screens. Nanjing-based CEC Panda makes 8.5-gen display panels, producing 60,000 pieces of 2,200 millimeters × 2,500 mm glass substrates each month. These are mostly used in TV sets and phones.

The second target firm, Chengdu-based CCPD, makes larger 8.6-gen display panels. It turns out 120,000 of 2,620 mm × 2,290 mm glass substrates a month. 

The deals will cause a whirl of reorganization in the industry among upstream material providers and downstream brands, Sigmaintell Consulting's General Manager Li Yaqin told Yicai Global.

Together with BOE’s capacity expansion, the acquisitions are expected to hand the company a 28.9 percent global market share in big LCD panels by 2022, further squeezing out small and mid-sized manufacturers, said Li. 

The deals should also help BOE improve its positioning in the fields of TV sets, esports equipment, and notebooks while enhancing its intellectual property portfolio and customer retention, Li added. 

BOE's stock price [SHE: 000725] fell 4.1 percent today to CNY4.91 (72 US cents). The benchmark Shenzhen Component Index ended 2.2 percent lower.

Editors: Tang Shihua, Emmi Laine